Bitcoin’s dizzying bull run is showing no signs of slowing down despite an uptick in U.S. government bond yields.

The cryptocurrency market leader set a new lifetime high of $51,348 early Wednesday, having penetrated the psychological level of $50,000 on Tuesday for the first time, according to CoinDesk 20 data. Prices have risen by 53% this month alone.

The latest move higher comes on the heels of an announcement by public listed company MicroStrategy that it plans to boost its bitcoin (BTC, +5.24%) stash yet again. The firm announced a $600 million debt sale on Tuesday, which will fund the additional purchases. The business intelligence firm has been buying bitcoin since August 2020 and is sitting on a profit of more than $2 billion on its holdings.

According to Avi Felman, head of trading at BlockTower Capital, MicroStrategy’s announcement may have been timed to force a break above the critical level of $50,000. The firm made a similar announcement on Dec. 7, following which bitcoin crossed above the then major hurdle of $20,000.

It remains to be seen if the latest move above $50,000 is sustainable, given that U.S. bond yields are rising and pushing gold lower. Bitcoin is widely considered a hedge against inflation like gold.

The yield on the 10-year Treasury note clocked a 12-month high of 1.33% early today and has risen by over 20 basis points this year. Gold is currently trading at a two-week low of $1,790 per ounce. Bitcoin, however, is showing resilience, and may come under pressure if and when real or inflation-adjusted yields rise.

As of Tuesday, the 10-year bond was yielding -1% in inflation-adjusted terms, according to data provided by the U.S. Department of the Treasury.

‘”Momentum funds who bought bitcoin as a hedge against inflation might sell if real yields rise,” Felman told CoinDesk.

Perceived store-of-value assets typically move in the opposite direction to real bond yields. For instance, gold rallied more than $600 to a record price of $2,075 in the five months to August, as the U.S. 10-year real yield fell from 0.55% to -1.08%. Bitcoin has charted a staggering rally over the past 11 months alongside a continued drop in yields.

However, yield rises may be limited, with the Federal Reserve running an open-ended bond purchasing program and inflation likely to get a lift from rising oil prices.

At press time, bitcoin is trading around $50,946, up 3.6% in 24 hours.

NewsSource: CoinDesk

Fees for transacting on the Ethereum network breached previous records, passing above $20 for the first time Thursday.

• As of 05:45 UTC, the average and median transaction fee on Ethereum reached as high as $23.43 and $11.77, respectively, data from Blockchair indicates.

• Ethereum last broke its transaction fee record a month ago on Jan. 11, hitting an average $19 per transaction. Current values double the peak transaction fees recorded during “DeFi Summer” of 2020.
• The increase in fees correlates with the general price run ether (ETH, +5.44%) has enjoyed since the New Year. The CoinDesk 20 places year-to-date returns on the digital asset at 130%.
• The increase in the cost of transacting on the Ethereum network also reflects growing demand for ERC-20 based tokens, particularly stablecoins and the red-hot decentralized finance (DeFi) sector.
• Led by tokens like uniswap (UNI) and aave (AAVE), DeFi’s total market capitalization is up 16.37% in 24 hours, according to Messari.
• Ethereum miners have been a primary beneficiary of the fee spike. The industry earned some $830 million in ether last month with 40% attributed from fees alone.

NewsSource: CoinDesk

High Demand for Bitcoin and Crypto Products

With the price of bitcoin rapidly rising over recent months, more investors are seeking exposure to the cryptocurrency. The price of bitcoin rose about 24% since the beginning of the year and over 90% since the beginning of December.

One bitcoin exchange-traded product in particular, BTCE, has recorded an average daily trading volume of $69 million in the first 11 days of January, the Financial Times reported Friday, citing data from Deutsche Börse where it is trading. This week, Switzerland’s principal stock exchange revealed that its crypto trading volume hit a record high of $1.2 billion in 2020. The exchange now lists 34 crypto exchange-traded products.

Grayscale Investments’ Bitcoin Trust posted an average daily turnover of almost $1 billion in the first two weeks of this year, which is more than nine times the average in 2020, the publication added. The bitcoin trust’s assets under management grew from $1.8 billion to $17.5 billion during the year.

Meanwhile, Canadian asset manager 3iq says its bitcoin fund has reached a milestone, exceeding one billion Canadian dollars ($785 million) in assets under management. Besides the bitcoin fund, the company offers the ether fund and a global crypto-asset fund.

Big Banks Want In, Including Goldman Sachs

As bitcoin continues to outperform other assets, more major companies are seeking to get into the crypto space. Goldman Sachs’ global head of commodities research, Jeff Currie, said last week that the bitcoin market “is beginning to become more mature” after he called BTC “a retail inflation hedge.” The investment bank is now rumored to be have issued a request for information (RFI) to explore providing digital asset custody service.

The RFI was reportedly sent to a prominent company in the crypto custody niche at the end of last year. An unnamed Goldman Sachs source indicated that the firm is talking to several companies with a focus on custody service.

Recently, the U.S. Office of the Comptroller of the Currency (OCC) granted Anchorage conditional approval to become a national digital bank. Anchorage co-founder Diogo Mónica told CNBC last week that the regulatory approval will attract many large institutional players to begin offering their own crypto services, including custody.

Other banks and financial services giants that have recently entered the crypto space include Spain’s second-largest bank BBVA, Standard Chartered Bank, Southeast Asia’s largest bank DBS, and Italian insurance giant Generali. Some of them offer only crypto custody services while others also offer bitcoin trading services.

Visa (V) is piloting a suite of application programming interfaces (APIs) that will allow banks to offer bitcoin services, the payments giant announced Wednesday.

The Visa Crypto APIs pilot program will let clients “easily connect into the infrastructure provided by Visa’s partner, Anchorage, a federally chartered digital asset bank, to allow their customers to buy and sell digital assets such as bitcoin as an investment within their existing consumer experiences,” Visa said in a press statement.

Visa envisions a product set that extends to other cryptocurrencies and stablecoins as well as other crypto services such as trading, Visa crypto lead Cuy Sheffield told CoinDesk in an interview. Digital bank First Boulevard is the first bank involved in the pilot; Visa has issued a waitlist for other banks.

Previously, Visa had been focused on helping crypto companies issue bank cards and has partnered with 35 crypto firms to date, but this is the first time the company has offered crypto services to banks.

Last week, Visa CEO Al Kelly said during an earnings call that stablecoins could be used for “global commerce,” adding that “to the extent a specific digital currency becomes a recognized means of exchange, there’s no reason why we cannot add it to our network.”

‘Next phase’

“This is shifting to the next phase of Visa’s strategy where we’re looking at how Visa can also be a bridge between the thousands of financial institutions … and help them tap into the growing world of crypto assets and blockchain networks,” Sheffield told CoinDesk in an interview. “We’re excited to see what early tests and consumer engagement look like for things like dollar-cost averaging to buy bitcoin or for things like earning bitcoin back as rewards.”

Similarly, digital asset manager NYDIG tapped banking technology provider Moven to offer NYDIG’s APIs for buying, selling and holding crypto to Moven’s bank customers. Both products come in the wake of several letters from the U.S. Office of the Comptroller of the Currency giving banks the green light to custody crypto and the ability to conduct payments and other activities with stablecoins. 

Creating a Black crypto bank

The news also coincided with an announcement from Visa that it would be partnering with five Black-focused banks and fintechs to offer financial and business services that cater to the Black community.

First Boulevard, the first firm to join the Visa pilot, is a digital bank that is building tools to help African Americans passively build wealth and will launch sometime in early 2021. The bank plans on using the bitcoin services and its partnership with Visa to educate its customers about bitcoin as a way to close the general wealth disparities faced by Black communities, said Donald Hawkins, president and CEO of First Boulevard.

In the future, Hawkins said he hopes his customers come to the bank rather than YouTube for information about investing in crypto.

Currently, First Boulevard offers customers 15% cash back for spending at Black-owned businesses. In the future, Hawkins plans to allow bank customers to put those rewards into crypto investments or high-yield crypto savings accounts. 

The institutionalization of cryptocurrency was the emerging theme of 2020, said Seamus Donoghue, VP Sales and Business Development at METACO, a provider of security-critical digital asset infrastructure for financial institutions, adding that, while the investment focus has largely been focused on BTC, ethereum (ETH) “will likely be a high beta alternative to the dominant narrative of Bitcoin as an institutional investment asset class.“ He said it’s possible for the same Fear of Missing Out (FOMO) which pushed retail into crypto and BTC’s price to its all-time high in 2017 to be replicated in 2021 as institutional FOMO.

He added that an acceleration in institutional money coming into BTC would have “a much larger and profound impact on the long term valuation of bitcoin–the risk is for a parabolic move in Bitcoin’s price in 2021.” It’s Donoghue’s opinion that,

There are many more positive expectations shared by experts. Eric Wall, the Chief Investment Officer of the crypto hedge fund outfit Arcane Assets, told Cryptonews.com that “it’s quite clear that bitcoin is making rapid progress in that it’s becoming an asset class that’s suitable addition to many investors’ portfolios.” Wall finds that the professionalization of bitcoin, as well as its inclusion in the portfolios of hedge funds, high-net-worth individuals, family offices and corporate treasuries is likely to only accelerate in 2021. “Retail investor adoption is likely to track this development,” he said.

Speaking of which, Erick Pinos, Americas Ecosystem Lead at open source blockchain Ontology (ONT), said that more large financial institutions will publicly announce that they have moved funds into BTC in 2021, which “will create a snowball effect not only for other large institutions to follow with their funds but also for the retail market to start moving more personal wealth into bitcoin.”

Seamus Donoghue added that retail will “play no small part in crypto” as they are given increasingly easier access to the markets. It’s bitcoin’s performance that will drive the narrative and, if the institutional market evolves as expected in 2021, rapidly expanding on-ramps will only add fuel to the fire. “Institutional investor adoption drives the build out of institutional infrastructure to support bitcoin’s adoption. This in turn provides the foundation for retail investment vehicles and retail on-ramps,” he said.

Binance To Help With Australia’s Distress

Many institutions and people from around the world, including foreign governments, private institutions, celebrities, and everyday people, have responded to the country’s current situation by offering prayers, thoughts, and donations to the Australian burnfire relief.

One of the latest donations comes from the Binance Charity Foundation, the blockchain-based charity division of the world’s leading crypto exchange Binance.

Binance Charity announced January 7 that it had made a $1 million (A$1.45m) worth of BNB donation as a lead for its new charity project, Australia Bushfire Donations, to raise funds for the dire situation in Australia.

According to Binance, the funds raised in the new initiative “will be used to help alleviate the impact of this disaster and facilitate the restoration afterward.”

Speaking about the development, Binance CEO, Changpeng Zhao (CZ), noted that it is saddening to watch the fires spread across Australia and its effects on human lives, properties, animals, and ecology.

“Donating for Australia Bushfires charity program is the most direct and effective approach to make an impact, and we are also calling for the whole crypto community to join us in supporting Australia,” CZ added.

The Cryptocurrency Community Can Weigh In Too

Members of the crypto community who wish to partake in the Australia Bushfire Donation charity project can donate with the Binance coin on the Binance Charity platform, which is decentralized and transparent. At the time of writing, 13 donations have been made, amounting to 120.5486 BTC ($1,001,855.80).

Meanwhile, some crypto influencers like Alex Saunders have rallied members of the crypto community to show the world the power of Bitcoin by donating BTC for the Australian Rural Fire Service.

Data from Blockchain.com shows that a total of $12,040 has been sent to the designated BTC address.

Why? To begin with, because it involves Binance, the behemoth exchange. And second, because there are rewards in-store.

In a tweet, the Loom Network announced that Binance launches its validator on Basechain. It then added that Binance Exchange offers monthly Loom airdrop rewards.

In the embedded medium article, the company explains, “Binance joins our pool of 21+ Basechain validators currently running nodes to help secure the network. As you may already know, validators help secure Loom Network’s DPoS mainnet — Basechain — by making sure that every transaction on the chain is valid and accurate.”

So, starting the 4th of January, the exchange will commence taking “live snapshots of user LOOM balances and airdropping LOOM rewards directly into your Binance account.”

At the same time, note that the company isn’t talking about soft staking. This means all you need to do “is have LOOM sitting in your account.” Concurrently, users don’t need to “lock” tokens away.

“You can simply get LOOM rewards directly to your account while maintaining the freedom to use your tokens whenever you need to,” the company explains.

The details of this program are available here.

A good year for Loom

The Loom Network also says that overall it’s been a good year for the company. For instance, it points out, “We made our mainnet and the Loom Wallet fully interoperable with Binance Chain by building an ERC20–BEP2 token bridge and bringing smart contract functionality to Binance.”

Besides, according to the company, it is now possible to send BEP2 tokens to Basechain. And then convert them to ERC20 tokens, “which you can withdraw to Ethereum mainnet — and vice versa.”

Other achievements include the release of a new CryptoZombies course on how to build on Binance Chain.

One of the interesting things to consider is whether there is a correlation between the number of active addresses and the prices of different cryptocurrencies.

Prices And Addresses

We know that the price of certain assets depends on numerous factors, such as fundamentals, trading volume, supply, demand, and so forth. The popular cryptocurrency monitoring resource, CoinMetrics, published another type of plausible price dependence – the number of active addresses. The report compiles data from January 1st, 2019 to December 31st, the same year.

By looking at the number of unique addresses in a particular network, one can more or less get a picture of how many users there are. It’s worth noting, though, that a single person can operate more than one address; therefore, these numbers represent the maximum possible users, but the actual number of daily users could be lower.

What Does It Tell Us?

So here’s the graphic showing red and green and so what? Let’s take, for example, Bitcoin. The largest cryptocurrency by market capitalization started last year at around $3,750 and finished at about $7,130, which represents an increase of about 90%, the report shows equal data. Interestingly enough, the number of active Bitcoin addresses has also surged by almost 16%.

Well, let’s continue examining the green data (first). Bitcoin Cash, currently placed 5th, has recorded an astonishing rise when it comes down to active addresses – almost 90%. At the same time, BCH’s price increased by 27.68%, according to the report.

Litecoin is also in the green in both categories – 12.56% climb in the number of addresses, and 33.60% in price. Tezos gathered notable steam during 2019, recording increases of 218% and 182%, respectively.

Bitcoin SV is the second-largest active addresses’ gainer with a 611% surge, while the price has been much more modest – only 5.21%.

And the 2019 winner is undoubtedly ChainLink (Link). It provides unmatched percentage increases, where its price skyrocketed with 513% and at one time was even at over 1,000%. Even larger is the number of active addresses – over 630% yearly increase but also at one point was over 3,000%.

Red On The Chart

As it usually happens, when there’s a positive movement, there must be a negative one as well. The second and third largest cryptocurrencies, Ethereum and Ripple, are both in the red. ETH’s price has dropped during 2019 with 5.65%, while the number of addresses is down with a little over 1%. XRP’s declines are more hurtful – 46.68% and 49.14%, respectively.

Stellar is also recording negative symptoms. XLM’s price plunges with 60%, and at the same time, active addresses are down with 66%. The same can be said for Zcash, showing around 51% declines in both categories.

The Exceptions

It’s well-known – every rule has its own exception, and this graph is no different. While the examples from the previous two paragraphs show cryptocurrencies recording losses or gains in both categories, there’re two cases provided with opposite data.

The first one is Cardano. ADA’s price didn’t have the best year, indicating a sizeable decline of over 20%. Yet, at the same time, the number of active addresses has risen slightly, with 2.38%.

Decred also shows a similar example, but its price has dropped only with 5.50%, while the addresses have surged with over 66%.

Conclusion

It’s still unclear if the number of active addresses has an actual impact on the price of a specific cryptocurrency. However, it’s interesting to see how, in most cases, both of these have experienced the same type of development in one year. It may be safe to assume that the more addresses are opened, the interest towards that asset increases, and vice-versa.

Over a year ago a Reddit user raised a red flag when talking about Bittrex and its KYC process. The thread titled “Bittrex.com may be illegally selling your KYC photos to criminals” contained a fistful of valid points. And all these debriefed the integrity of the KYC process.

But it was the cryptocurrency influencer Heidi’s recent video that rekindled our desire to dig further. In the video, she talks about why she feels KYC is a scam.

First things first, what is KYC?

Some time ago a good portion of centralized exchanges made KYCs mandatory. “We want to know our customers better,” that’s the kind of rationale they mentioned. According to them, KYC is their safeguard against financial crimes and regulators. This seemed to bode well both for traders and the exchanges.

But the tables have turned. Now, the traders are discontent. That’s because they are asked to submit highly sensitive and personal details. For example, residence address, social security number, utility bills, birth date, citizenship, and government-issued photo ID, latest photograph and even a photo of your bank card.

Undoubtedly, the nature of the information demanded is highly sensitive. In an attempt to appease the regulators, the exchanges seem to be treading a fine line between customer privacy and regulatory demands.

Your privacy is at risk

Now you might be ok with sharing your private info with credible exchanges. But how do you feel about hackers obtaining it? After all, the Binance KYC hack in August 2019 proved that sensitive data is not in safe hands. Millions of KYC documents were leaked. As per the hacker’s statement, Binance never contacted him to check the legitimacy of the claim.

But this not the only risk. Bear in mind that the exchanges asking the KYC information hand over all the sensitive data to a third party for processing. Binance, for instance, admits that Refinitiv is its KYC partner. But not all of the exchanges are willing to share this type of info.

In her video, Heidi mentions the example of a cryptocurrency exchange that outsources its KYC verification services to Fractal. From the privacy policies of Fractal, it is evident that the company is not taking the privacy of the KYC information too seriously.

Why is “No KYC” a trap?

The centralized exchanges sensed that informed traders will not trust them with private data for long. Now the exchanges seem to be turning to a “No KYC” tactic instead. There is a reason why we call it a tactic.

The platforms that offer the “No KYC” option allow traders to create an account within a few seconds. For instance, recently, Justin Sun, CEO of Tron, created a Level 1 account on Poloniex within 20 seconds. Accordingly, the traders can start depositing and trading at lightning speed. And this is exactly how the exchanges trap the traders.

The KYC comes into a picture when the trader wishes to withdraw his/her funds. For example, Poloniex poses a withdrawal limit of $10K per day without KYC but there are others that do not allow any withdrawals without KYC.

Never-ending KYC demands

The KYC process is not a one-time thing. It seems the exchanges are demanding valuable private information from traders as a “ransom”.

Crypto traders have raised voice against exchanges becoming invasive about KYC. In the comment section under Heidi’s video, a user called David Raborn said Bitterex is asking him for more KYC details by 14^th Jan (Image 1), while others, namely Charles Patterson, complained of “Fresh Selfie” demands time and again to allow withdrawals (Image 2).

Image 1 Source: amia.io

Image 2 Source: amia.io

KYC side effects

Each country has a set of KYC laws so that the financial bodies can avert risks. For the cryptocurrency exchanges to operate in a particular jurisdiction, they are required to comply with the KYC process.

To keep on the right side of the law the majority of exchanges adopted the KYC model. And others moved to countries like Malta where no stringent KYC compliance is required. As these laws have no specific standards, the exchanges are becoming invasive. This leads to some potential side effects. These include:

• Exposure to the dark web

Trader’s sensitive information might end up being exposed to the dark web, where identity thefts are a common occurrence.

• Limiting the usage of cryptocurrency

If we aim to use cryptocurrency like regular fiat, then we need to have a different setup. The one that does not require us to produce our KYC information for every withdrawal.

• It is not Satoshi’s version

Satoshi’s version of decentralized currency did not want the users to present a government ID to buy cryptocurrency. Thus this set up is not purely decentralized.

Turn it around

In order to trap the bad actors in the space, the exchanges and regulators are jeopardizing sensitive information of millions. It makes little sense. All this has turned the crypto ecosystem into a surveillance market, making it a honeypot for data hackers. Both the exchanges and regulators need to find out a better way out.

Let us know your opinion about whether KYC is a scam.

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While most people are aware of the top digital assets and what they are supposed to do, let’s take a look at other, less-known cryptocurrencies and their usage in the real world, if any.

Beginning With The Big Shot

Let’s start from the top of all cryptocurrencies by market capitalization. The first-ever is Bitcoin, and it serves as a peer-to-peer electronic payment method. It’s a digital currency with value and it’s not owned by any central entity like a government or a central bank, whence comes the word “decentralized.”

As it’s the world’s largest and most popular cryptocurrency, it naturally gets most of the attention. CryptoPotato has previously reported about five of the major industries where you can use it to buy different goods or services.

In terms of actual usage as a payment method, a recent video from a non-cryptocurrency YouTuber shows how far it could go. He tried living a full day in London only using BTC, without relying on cash or credit/debit cards.

He starts with how to purchase some from the largest U.S.-based crypto exchange – Coinbase. Since he couldn’t use actual bitcoins to order a taxi, he had to do it through cryptocurrency-based pre-paid cards. Further on, he managed to buy food, found a few Bitcoin ATMs, and even purchase a plane ticket to Amsterdam.

Overall, he goes through the day with some troubles, proving that Bitcoin has come a long way for the last ten years, but it’s still not as mass adopted as the community might like it to be.

What About The Rest?

If the largest cryptocurrency has some issues being used for its true purpose around the world, what’s left for the other, less-known projects. The topic was brought up in a Reddit post a few days ago, and it attracted a lot of responses. Users are showing several examples of how different crypto projects are implemented in the real world, but the number is not that impressive. Yet, some of them are:

• Steemit – a blockchain-based blogging and social media website rewarding users with its own cryptocurrency – Steem.
• Particl – an open-source and decentralized privacy marketplace platform built on top of blockchain to work with any cryptocurrency.
• LBRY – a decentralized content sharing and publishing platform. A few weeks ago, the largest (centralized) video sharing platform, YouTube, started removing cryptocurrency-related content from its site, and the community urged for more decentralized options.
• Travala.com – one of the largest blockchain-based travel booking platforms, accepting not only Bitcoin and its native cryptocurrency AVA as a primary payment option but also PayPal and Credit/Debit Cards.
• Golem – Decentralized cloud computing.
• Arweave – Decentralized platform for archiving content.
• Sia & Filecoin – both generally have the same idea, serving as decentralized digital storage for data.

Some other mentioned projects used in the real world included NANO, VeChain, Factom, Brave (BAT), and Monero.

However, for the most part, the post is focusing on actual arguments among users whether or not blockchain has delivered on its promise to help decentralize common fields of our livelihoods. Most people agree that the technology provides excellent potential uses but is yet to be implemented in a way that will assist the “average Joe.” It’s also worth noting though that we are still in the initial stages of its evolution, similar to where the internet was in the mid-90s, and that turned out to be rather disruptive, didn’t it?

In this chain of thought, it’s perhaps worth noting the prognosis of one of the most vocal proponents of blockchain-based technology, the prominent investor Tyler Winklevoss.

He recently stated that he believes digital ledger technology will become as essential as emails. Moreover, he thinks that it has already managed to become more than just a niche.

While there’s still a long way to go, it’s perhaps safe to say that implementations are evident and that the field is maturing, hopefully, in the right way.

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